Summary of ECA Board Meeting October 24, 2017

Board Present: Zlatan Beca, Makarand (Mac) Dehejia, Monique Fridell, Al Muller, Connie Row, Lyle Schwartz, Rhonda Taller (new)

Others Present: ECA General Manager MaryAnn Hall, Gates Hudson Portfolio Manager Larry Hirschman, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer, Chtd.)

HIGHLIGHTS OF THE MEETING

President’s Report

Board Member Resignation—On October 6, 2017, Pat Batey resigned from the Board. She was replaced by the Board as the Bylaws are written by Rhonda Taller. Others considered were Molly Frantz and Jim Jones.

Legal Counsel’s Report

On October 10, 2017, Montgomery County has enacted a new law pertaining to short term rentals (less than 90 days) such as those done by Air BnB. One feature of this law, which goes into effect July 1, 2018, is that anyone participating with Air BnB must obtain a license. The Elizabeth does not permit short term leasing.

More info at: http://montgomeryplanning.org/planning/functional-planning/short-term-residental-rentals/

Financial Report

The Elizabeth funds are all in the black and delinquency collection continues to show gains. The final payment for EPipe work has been made.

General Manager’s Report

Elevator Inspection: Inspection completed and now awaiting new certificates.

Cleaning Main Sewer Lines—main sewer lines have been cleaned. Next step deals with clearing pipes that affect riser stack cleaning.

The upright exercise bike—New bike installed. Waiting for a part for recumbent bike.

Garage Repair Project—independent verifies need to repair concrete that is failing under the seemingly pristine garage floor coating.

Landscaping—Fall flowers were planted.

Trash Chute Cleaning—Both towers has trash chutes cleaned. Next project will be dryer vent cleaning next month.

Boiler Tubes—Cracked boiler tubes were replaced, eliminating the need for frequent replacement of chemicals to keep the closed loop system water clean.

Pool Pump—An energy efficient pump has been installed which should save us $1800 in utility costs yearly.

Window Cleaning—is underway from October 24-27 by Diamond Window Cleaners. Our GM negotiated a several hundred-dollar reduction in cost from their work last year.

Metal and Stone Cleaning—a service done on a quarterly basis is underway in the afterhours time frame (7 pm to 3 AM).

EPipe credit—we received a several thousand-dollars credit.

Halloween Party—October 31 from 3:30-5 pm. Remember we do not allow door-to-door trick-or-treating.

New Business

Motions

—Adopt the Strategic Plan process: Approved by 6 board members.

The two motions deal with two different scenarios, one involving a special assessment and the other concentrating on raising condo fees.

5550 Friendship Blvd Development

The developers of the property next door to The Elizabeth have withdrawn their application to build for now. MD Park & Planning Commission was set to reject their plan.

Unit #10

Unit #10 is owned by the Association. The hope is to sell this unit when the market is right. Someone living in the building is interested in renting the unit with option to buy at the current price. The Board agreed to rent now and hope for a better market price in a couple of years.

Summary of ECA Board Meeting September 14, 2017

Board Present: Zlatan Beca, Makarand (Mac) Dehejia, Al Muller, Connie Row, Lyle Schwartz

Board Absent: Patricia Batey, Monique Fridell

Others Present: ECA General Manager MaryAnn Hall, Gates Hudson Portfolio Manager Larry Hirschman, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer, Chtd.)

HIGHLIGHTS OF THE MEETING

President’s Report

Circuit breakers—Each individual owner will be responsible for a written inspection of their electrical breaker box. Those who renovated their electrical can get that report from their contractor. Building management will engagement a company to do the inspection as the best price. Anticipated price would be $40-$50. Failure to do the inspection will result in legal action by the Association.

Legal Counsel’s Report

http://sos.maryland.gov/Documents/CondominiumBooklet.pdf

The Montgomery County Condominium Act as amended July 2017 now allows changes to bylaws as follows:

Notwithstanding the provisions of the bylaws, the council of unit owners may amend the bylaws by the affirmative vote of unit owners in good standing having at least 60% of the votes in the council, or by a lower percentage if required in the bylaws.

This change may help provide the option of imposing a special assessment.

Financial Report

The Elizabeth has now achieved FHA recertification, a process that was initiated in June 2016. Based on the outstanding loan and inadequate dollars in the reserve fund, FHA recertification was denied six times.

Treasurer’s Report

Connie Row reported on this past week’s strategic planning meetings and the products coming from those sessions, including a Strategic Financial Plan.

General Manager’s Report

Update on Unit #10: The ECA General Manager interviewed five realtors. Three said rent the unit because there are 20 units on the market for sale with 12 being one bedroom units. Recommendation is to rent at this time the newly renovated unit at approximately $2000 per month.

Failed Third Party Elevator Inspection—six small items such as lights out in the pits caused the Allstate Elevator inspection to fail. Otis has been called in to correct the problems. Allstate will return for a second inspection once Otis completes the work.

Cleaning Main Sewer Lines—main sewer lines must be cleaned before hydro jetting cleaning can be done in the riser stacks. The west side has presented a challenge since the manhole cover is not close to our building as is the case with the east side. There are only two companies in this area that have the equipment to do this work. Proposals from these two are expected next week. This was not a budgeted item and will be paid out of the Operating Contingency Fund.

The upright exercise bike—a used bike in “great condition” has been purchase for $1800 versus a new bike from RMS for $5200. The ECA Board President found this cheaper alternative.

Garage Repair Project—because of falling ceiling concrete and standing water, extensive work is required in the garage. The entire project could cost over $1 million to complete. First steps includes FEA drawing up the Scope of Work, selecting five bidders, selection of the best bidder. The work would begin in March 2018. FEA recommends completing the work in one phase by 2019.

New Business

Motions

—Adopt the Strategic Plan as revised: Approved by 5 board members.

—Assess Lobby temperature problems: Approved by 5 board members.

—Fix Main Entrance cracks: Approved by 5 board members.

—Replace pool filter and pump: Approved by 5 board members.

—Write Scope of Work to begin Garage Project: Approved by 5 board members.

—Snow removal services: Approved by 5 board members.

Work by ECA legal counsel Jeremy Tucker:

—Draft bylaw amendment for 60% approval of special assessment: Approved by 5 board members.

—Draft bylaw amendment for changing Board Member terms from 3-4 to 2-2-3: Approved by 4 board members.

Special Report on 5550 Friendship Blvd Development

The developers of the property next door to The Elizabeth want to build an 18-story building (condominium).

The consequence is two years of building and construction noise. The building will block current views from Elizabeth apartments on the East Side and may bring down property values. It will be harder to park on the street in the neighborhood. Long term, there will be more noise amplified by adding another high-rise building. This noise amplification is called the canyon effect.

December 7, 2017, there will be a hearing. If you want to voice your concern about this development project, it would be important to attend this meeting. A decision will be made in spring 2018. These decisions are heavily dependent on politics. Therefore, what you say can help stop the project.  [Details provided by Al Muller.]

Summary of 2nd Strategic Financial Planning Meeting August 14, 2017

The second Strategic Financial Planning meeting was held August 14, 2017. As outlined in June, the purpose of this meeting was to:

—review the Gates-Hudson presentation of options for Strategic Financial Planning, based on the Reserve Study and need for capital improvements at the Elizabeth given its current financial condition

—hear recommendations regarding possible restructuring of the $5 Million loan

—hear Management recommendations with regard to priorities of projects within the Reserve Study

Copies of all presentations are posted on Building Link for those who were unable to attend or did not receive copies at the meeting.

SUMMARY OF THE MEETING:

1.     —— Lynn Kiley, Gates-Husdon reviewed some of the original slides emphasizing the importance of Strategic Planning by condo boards so they could fulfill their fiduciary responsibility to maintain and improve the building. She explained that there are only three financing options for paying for capital improvements—condo fee increases, special assessments, or borrowing. The Elizabeth had maxed out its borrowing capacity. Therefore, the Board needs to face balancing issues of cost and need and then adopt a plan consistent with its fiduciary responsibility. She addressed Bylaws changes to create continuity in Board terms of office, consistent with the practice of well-manage condominiums. Finally, she recommended that the Board approve the Year 1 plan for reserve study projects presented by management in the next presentation.

2.    —— Larry Hirschman, Gates-Hudson presented the results of the Gates-Hudson study of loan refinancing options, requested by the Board last year. He pointed out that a simple repayment of the loan could be done with a special assessment to owners, but that would not address the current needs of the condo. To deal with the cash flow issues, refinancing the loan seems the best approach. Check meeting handout for specifics.

3.     ——Mary Ann Hall, ECA General Manager: she presented the results of her study of the reserve study items, regarding which had already been done, which could be deferred, which could be restructured, which needed to be done this year, and what projects needed special emphasis. Of increased concern were garage projects and resident load centers which are the circuit breaker boxes and hydro jetting of riser stacks. Final costs for these projects are pending. She then went on to present a plan for the halls different and less costly than the one presented in the past. Because the doors did not need and could not be replaced because of secondary issues, and because the hall project could be phased, she believed cost savings were likely. She then presented her recommendations for projects to be done this year, which did not include the halls, for a total of $965,300 with the cost information she currently has. Further information will be available in September so the Board can make decisions.  If the final figure is $965,300, it could be covered by budgeted reserves, and phase one of the halls could be added, if additional cash became available, for example through sale of unit 10 or loan refinancing. She finished by adding that looking at reserve study expenditures on a one to two-year frame was necessary in this older building because of the risks of non-planned replacement and repair needs.

Board member and resident questions followed. The option and value of a Bylaws amendment to reduce the required owner majority from 75% to 60% was discussed.  Ms. Row asked everyone to submit further questions, using a question handout by August 28.

HIGHLIGHTS OF THE MEETING:

This week, a selected number of units of the Elizabeth are being tested for hot spots emanating from electrical breaker boxes. Breaker boxes are supposed to be inspected every five years and have not been. If building-wide rewiring is required, this could add an additional and immediate expense to the current budget.

While it requires a 75% approval of Association membership to levy a special assessment, if a critical expense arises that jeopardizes health and safety, then the Board could impose a special assessment without needing Association approval.

Our general manager MaryAnn Hall has devised a three-part plan for hall renovation beginning with new carpet and wall refurbishment (either paint or wallpaper). Phase 2 would address lighting and ceiling tiles. Phase 3 would deal with furniture. The caveat is that no structural/construction activities would be allowed which has something to do with county code requirements.

The next step will be a resident Q and A session on September 12.

Next Board meeting is September 14, 2017.

ECA Special Board Meeting August 9, 2017

Board Present: Zlatan Beca, Patricia Batey (on telephone), Makarand (Mac) Dehejia, Monique Fridell, Al Muller, Connie Row

Others Present: ECA General Manager MaryAnn Hall, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer, Chtd.)

Lyle Schwartz was selected to replace the seat held by Mark Day. The Board voted 4 to 2 for Schwartz.

The Board will beinterviewing and selecting a realtor to sell Association-owned Unit 10.

Summary of ECA Board Meeting July 26, 2017

Board Present: Zlatan Beca, Patricia Batey (on telephone), Mark Day, Makarand (Mac) Dehejia, Monique Fridell, Al Muller, Connie Row

Others Present: ECA General Manager MaryAnn Hall, Jeremy Tucker (ECA legal counsel, Lerch Early & Brewer, Chtd.)

HIGHLIGHTS OF THE MEETING

President’s Report

President Beca discussed selection process that resulted in appointment of Makarand (Mac) Dehejia. The Board Mac Dehejia chose from among six qualified candidates.

Beca said his Pound Table event was successful but the next event will impose a 3 minute time limit for those wishing to speak.

There will be no Board meeting in August but there will be a strategic budget planning meeting August 9. This is part of the ongoing budget outreach programs to help owners understand the financial needs of maintaining an aging building.

  

New Board Vacancy

Mark Day announced he and his wife are selling their apartment and moving to Charlottesville, VA. He said they came to the Elizabeth from a college town and they realize that small town living is what they prefer.

Beca said anyone wishing to be considered for this Board opening can submit their name to the Board. He also said he still has willing candidates from the last call.

Legal Counsel’s Report

A No Trespass order has been put in place against a constant visitor to a particular resident. This visitor has proved to be a risk to resident safety.

Financial Report

The budget meeting proceeding the July Board meeting raised questions about actual versus projected deposits to the  Operating Contingency Reserve Fund. A written explanation was provided by auditor Jeremy Powell saying that our finances are lawfully being carried out.

General Manager’s Report

Fire and elevator inspections were carried out successfully such that these systems are operating well within the mandates of County codes.

The new cleaning contractor after three months has awarded raises to our onsite staff. The General Manager reminded the Board and Association attendees that the Association saved over $50,000 by hiring the Milenkos Cleaning.

Security cameras have been installed in the pool area with no reports of problems there so far.

Garage floor cleaning was completed.

The exercise bike which has been sporadically working in our exercise facility cannot be repaired because there are no available replacement parts.

New Business

The General Manager asked for approval to spend $5000 on new furniture for the management office. The furniture would better serve staff (getting files off the floor and off the top of file cabinets as well as make the office look more professional. There are a lot of prospective buyers coming to the management office since there are over 16 apartments for sale in the building. The Board unanimously approved this expenditure but not without questioning whether the expenditure could wait.

Comments from the Floor

Noise problem in detailed in one residential unit. Beca requested being called at any hour to access the noise level which hasn’t been acted on by unit owner.